Input to the Parliamentary Portfolio Committee on Labour

Input to the Parliamentary Portfolio Committee on Labour 9 May 2007

The presentation is divided into four sections; Section 1: The workings of Nedlac Section 2: Work programme for 2007/8 Section 3: Budget allocations Section 4: Key challenges Section 5: Way forward

NEDLAC PRINCIPALS GOVERNMENT T Didiza T Manuel M Mdladlana M Mpahlwa LABOUR BUSINESS Dennis George General Secretary FEDUSA Mahlomola Skhosana General Secretary NACTU Zwelinzima Vavi General Secretary COSATU COMMUNITY Ruth Bhengu Laura Kganyago Mike Ka Toni Blade Nzimande SANCO WNC DPSA FSCC OVERALL CONVENORS V Mkosana E Patel R Parsons S Shezi Government Labour Business Community

SECTION 1 WORKINGS OF NEDLAC

OUR VISION The constituencies of Nedlac - government, business, labour and community re-affirm their commitment to social dialogue and working together to address the economic and development challenges our country faces. The constituencies also commit themselves to a common vision for promoting rising levels of growth, investment, job creation and people-centred development.

OUR MISSION The Nedlac social partners will focus on; Building an enduring partnership – Promoting a shared vision of South Africa’s growth and development strategy to frame sector and developmental agreements and lay the basis for partnerships in action. Addressing urgent challenges – Selecting from many possible interventions those which old the promise of the greatest possible impact in the shortest possible time for accelerated investment, job creation, improved efficiency and productivity, greater social equity, and a fairer distribution of economic opportunities and rewards, while undertaking serious social dialogue on broad policy frameworks.

Strategic Objective Strategic Objective Tackling the urgent challenges facing the economy and build an enduring partnership that would help build a prosperous SA. Negotiations that aim to deliver formal consensusbased agreements on the economic and social policy. Building sustainable partnerships that deliver on the key challenges facing the country on the social and economic fronts. Selecting from many possible interventions those which hold the promise of the greatest possible impact in the shortest possible time Nurturing the common vision which seeks to make South Africa the leading emerging market and destination of first choice for investors whilst retaining and expanding social equity and fair labour standards

MODUS OPERANDI To meet these objectives, the representatives of organised business, community, labour and government engage in: Negotiations that aim to deliver formal consensus-based agreements on the economic and social fronts. Consultations that aim at developing policy prior to it being tabled for negotiation or implemented. Information sharing, workshops and seminars that report on and assess the implementation of social and economic policies. Research that guides the formulation and implementation of social and economic policy. Resolving socio-economic disputes in terms of section 77 of the LRA.

Work Streams STANDING COMMITTEES • Section 77 Standing Committee • Demarcations Standing Committee • Standing Committee on Trade Agreements (Teselico) Trade and Industry Chamber 6 Government 6 Business 6 Labour Lead Govt Dept - Trade and Industry DEVELOPMENT CHAMBER LABOUR MARKET CHAMBER 6 Labour 6 Government 6 Business Lead Govt Dept - Labour PUBLIC FINANCE AND MONETARY POLICY CHAMBER Lead Govt Dept – National Treasury 6 Labour 6 Government 6 Business 6 6 Labour Government Business Community Lead Govt Dept - DPW

WORK PROGRAMME – 2007/8 PER WORK STREAM SECTION 2

LABOUR MARKET POLICY WORK STREAM KEY FOCUS AREAS

KEY FOCUS AREA OUTPUT KEY PERFORMANCE INDICATOR STATUS STRUCTURE Demarcation Decide demarcation issues tabled with the committee Consider applications as and when forwarded by the CCMA to the secretariat Issues Driven Demarcation Standing Committee Companies Bill: Ch 6 Business Rescue Model Nedlac report with maximum areas of agreement Consider the Business Rescue Regime in respect of companies as proposed by the DTI Engagements have commenced Insolvency Technical Task Team Insolvency Bill Nedlac report with maximum areas of agreement Consider the Bill presented by the Department of Justice with the focus on insolvency of individuals, partnerships and trusts Engagements have commenced Insolvency Technical Task Team Changing Nature of Work in Nedlac report with maximum areas of agreement To analyse and evaluate the trends, determinants and policy implications of atypical forms of employment Social Plan Review Nedlac report with maximum areas of agreement To consider the need to review the existing social plan in accordance with the Review Report Engagement in Nedlac Manco Atypical Forms agenda has been set of Employment Task out and Negotiations Team have commenced Engagements have commenced Social Plan Review Task Team

KEY FOCUS AREA OUTPUT KEY PERFORMANCE INDICATOR Superior Courts Bill To reach agreement with the Department of Justice and Parliament to retain separate Labour and Labour Appeal Courts. Meeting with the President. Interaction with the Department of Justice and with Parliament Medical Schemes Amendment Bill Nedlac report with Consider the Bill, maximum areas of specifically how it would agreement impact on employers and employees. Constituencies are Nedlac Overall finalising their comments Convenors on the Bill. Engagement with the Minister of Public Service and Administration is being planned to address sequencing of issues as the Bill went to parliament without first being tabled in Nedlac Single Public Service Nedlac report with maximum areas of agreement After the request from Nedlac the DPSA presented the draft policy in Nedlac. DPSA still to indicate if they would be tabling the Bill for consideration in Nedlac. Consider and deliberate on the draft policy Bill with a view of influencing and steering the process to accommodate the society at large STATUS A meeting with the Minister of Justice and Constitutional Development has been scheduled. STRUCTURE Task Team

KEY FOCUS AREA Labour Market Policy Review Employment Equity Jobs Impact and Monitoring OUTPUT KEY PERFORMANCE INDICATOR To engage in Negotiations Producing with a view to reach agreement Agreement on the key areas that justifiably require revisiting on the Labour Market Policy front To enhance reporting and monitoring process and possible training courses in employment equity. a STATUS STRUCTURE Nedlac Two Ministerial roundtable Manco Task Team discussions held with the Minister of Labour, however Govt has table considered position on the matter Increase awareness on matters pertaining to employment equity, giving attention to longer term initiatives in the employment arena. The Task Team is Employment Equity Task Team currently looking at the aspects as described in the output. With the incorporation of Workplace skills plan into employment equity initiatives. Further the Task Team would design the long term plans. Consider ways in which to Finalise Nedlac position on Ongoing give effect to the GDS recommended measures to Agreement on jobs impact implement jobs impact monitoring

TRADE AND INDUSTRY WORK STREAM KEY FOCUS AREAS

Key Focus Area Key Performance Indicator Measurement Status Structure Enhancing the role of Coordinate a process to Produce a Nedlac report The standing committee on Teselico and the Chamber women in business assess impact of BEE on BEE that emphasizes Trade is engaging on these Assess implications of the developing women in issues. BBBEE Codes, particularly business on women in business. Assess how the Codes will be aligned with the relevant policies. Infrastructure Examines the linkages Produce a Nedlac report The standing committee on Teselico and the Chamber development between infrastructure that clearly highlights policy Trade is engaging on these development and linkages between the manufacturing growth, different areas. issues logistics, reducing the cost of business, regional development, State Owned Enterprise activities Industrial Policy & The process to finalise the To produce a Nedlac Constituencies made initial Policy sessions with the Strategy country’s Industrial Policy agreement on the issue. comments on the policy Minister and Deputy and awaiting Minister Davies and Strategy is fast tracked announcement by the Minister of Trade and Industry

Key Focus Area BBBEE Key Performance Indicator Measurement Status Set up a process to Agreed instruments to The Chamber is setting up examine cross cutting mitigate the unintended the task team to engage issues that impacts on consequences of the with this issue. SMMEs and Cooperatives Structure . Task Team BBBEE policy framework A waits the report from the Assess implications of the government exercise on BBBEE Codes on small this issue. business. Assess how the Codes will be aligned with the relevant policies Promotion of SMME’s Investigate obstacles to Finalisation of new Awaits the report from the SMMEs development and measures to remove the government driven review examine ways to address obstacles process Prioritised sectors; (BPO, A process to identify A Nedlac Agreement is Completion of sector tourism, metals and strategies to unlock the produced. summit agreements for engineering, value on the prioritised construction, metals and construction, Clothing sectors commences. engineering and initiation Task Team them. and Textile, Chemical, of sector summit processes Agri-Business, for BPO, tourism, clothing regulatory impact and textile and agri- assessments, pre-impact business. Task Team

Key Focus Area Services Key Performance Indicator Measurement Status The task team to lead with A nedlac agreement is The task is engaging on services negotiations and produced for consideration the issues. the multilateral (WTO) and by the Chamber and bilateral trade negotiations Manco respectively. is set in motion Structure Teselico Task Team on Come up with an agreed Services Examine the implications of country’s approach to multi the collapse of the Doha -lateral trade system in the Round light of the challenges within WTO-NAMA Coordinate process to Final Nedlac position on The standing Committee interact with Government market access for industrial on Trade is engaging on the outcomes of the goods (at the WTO The standing Committee on Trade the issues Hong Kong Ministerial talks negotiations) and the recent developments within the WTO. SACU negotiations with Coordinate interaction with Nedlac reports to be The standing Committee The standing committee on EFTA stakeholders on trade adopted on trade on Trade is engaging on Trade negotiations with EFTA, the issues Coordinate process to Develop Nedlac report on The standing Committee The standing committee on review SADC trade protocol. on Trade is engaging on Trade SADC mid-term review protocol and technical the issues

KEY FOCUS AREA SACU-India KEY PERFORMANCE INDICATOR MEASUREMENT Prepare the list of products An agreed list is agreed of export interest for Negotiations are on track and tabled in MANCO for consideration by the STATUS STRUCTURE Standing Committee on Trade consideration and sign-off. committee. Subcommittee engages on A house view is developed Negotiations are on track Standing Committee on the merits and demerits of and agreed. It is tabled in Trade formalizing trade SACU-China MANCO for consideration. arrangements with Analysis of all available studies; identification of areas for further study and further study commissioned; identification of threats and opportunities, strengths and weaknesses. Chemical Sector Convene a conference to Chemical Sector summit The report has been Standing Committee on summit officially launch the state of readiness report is signed off by Manco. The Trade Chemical Sector tabled in MANCO for Agreement awaits Partnership Strategy consideration and sign-off signature by the constituencies. ICT Sector Coordinate a process A programme of Reconvening of ICT Sector

DEVLOPMENT CHAMBER WORK STREAM KEY FOCUS AREAS

KEY FOCUS AREA Expanded Public Works Programme (EPWP) KEY PERFORMANCE INDICATOR MEASUREMENT Building linkages with the Agreement on specific social dimension of the Programme. EPWPs. Comprehensive Social Engaging with the various Finalising a Nedlac Security government interventions on agreement/report on social security including key security and the National aspects of the Taylor poverty line as tabled by Commission STRUCTURE projects that takes forward the Expanded Public Works STATUS Engagements ongoing Chamber Commenced engagement Manco Task Team National Treasury. Awaiting government to table Task Team recommendations and the government proposals to set a national poverty line for SA. Housing Agreement on the policy Engagement in the framework regarding Farm Development Chamber the revised draft policy. worker and Occupier Housing Assistance Programme. Transport Nedlac social partners to Government to table the draft develop an agenda that policy for consideration at highlights gaps in the current Nedlac transport national policy Awaits input from Government Chamber

to strengthen social apartheid planning which dialogues at local level undermines social and economic integration and employment in order to achieve broad socioeconomic integration Implement poverty alleviation and local economic development programmes including extending basic service, whilst creating adequate social safety nets to protect the most vulnerable in communities. Promotion of Cooperatives Create and develop Awaits the finalisation and Awaits the finalisation of income-generating implementation of the co- the cooperatives bank bill activities, savings and operatives strategy and the investment, develop cooperatives Bank Bill human resource capacities, improve social and economic well-being and establish and expand a viable and dynamic distinctive sector of the economy which includes co -operatives, that responds Task Team

KEY FOCUS AREA Energy KEY PERFORMANCE INDICATOR MEASUREMENT STATUS To develop a broad Produce a Nedlac Constituencies to input framework of universal agreement on the redistribution access to electricity that Universal access to aspect of electricity. takes into account electricity and the environmental implications STRUCTURE Chamber

PUBLIC FINANCE AND MONTERAY POLICY CHAMBER- FOCUS AREAS

KEY FOCUS AREA KEY PERFORMANCE INDICATOR MEASUREMENT STATUS Social Security and Retirements Fund Reform Develop a Nedlac Agreement Address the legacy of The Minister of Finance on Government Policy apartheid planning has tabled a policy proposals on Social Security which undermines discussion document on and Retirement Fund social and economic Social Security and Legislative Framework integration and STRUCTURE Retirement Funds Manco Task Team employment in order to provisions for consideration achieve broad socio- by Nedlac. economic integration Implement poverty Engagement has alleviation commenced on the social security framework. Budgetary Processes including MTEFP Create and develop income- Realigning the Nedlac Two high level policy generating activities, savings Stakeholders sessions with government and investment, develop engagement on the were held. The recent human resource capacities, Government budget engagement was held on improve social and economic cycle. Chamber 23 February 2007. well-being and establish and expand a viable and dynamic A new programme of distinctive sector of the engagement is being economy which includes co- finalised. operatives, that responds to the social and economic needs of the community. Performance of SETAs To agree on a framework to Regular engagement The chamber has had its Chamber

KEY FOCUS AREA KEY PERFORMANCE INDICATOR MEASUREMENT STATUS Implementation of the Ensure progress in the Monitor progress on Financial Charter implementation of the Finance Charter Summit Decisions. Financial Sector Summit by the Finance Sector Council reported on the (Charter Council) getting regular reports from Summit agreements activities of the Charter the Finance Charter Council. The Principal Officer of STRUCTURE Manco Task Team council as at the end of (The Charter Council has 2006 period. 21 members representing, business, black professionals in the industry, labour, community and Government. ) Cooperatives Banks Bill Reach agreement in Nedlac Creating an enabling Nedlac finalised on key policy aspects of the environment for the engagements on the cooperatives banks Bill. promotion of policy aspects of the Bill Cooperatives Chamber and a report sent to development in South Government. Africa The Bill awaits finetuning by the National Treasury Administered Pricing Develop a framework that Agree on a The study on Fridge and the Chamber

Economic Performance Calendar year 2003 2004 2005 Actual 2006 2007 Estimate 2009 Forecast Percentage change unless otherwise indicated 2008 Final household consumption 3. 5 6. 7 6. 6 7. 0 5. 7 4. 8 5. 0 Final government consumption 6. 3 5. 2 5. 6 4. 5 4. 6 4. 5 Gross fixed capital formation 9. 1 9. 6 12. 0 10. 7 10. 9 11. 1 Gross domestic expenditure 5. 2 7. 9 5. 9 7. 9 5. 1 5. 8 6. 1 Exports 0. 1 2. 9 8. 0 3. 9 7. 3 6. 4 Imports 8. 1 14. 5 10. 7 14. 3 7. 9 8. 4 8. 5 Real GDP growth 3. 1 4. 8 5. 1 4. 9 4. 8 5. 1 5. 4 GDP deflator 4. 6 5. 8 4. 8 5. 8 4. 9 5. 4 GDP at current prices (R billion) 1, 260. 7 1, 398. 2 1, 539. 3 1, 709. 1 1, 893. 8 2, 087. 3 2, 318. 1 6. 8 4. 3 3. 9 4. 6 5. 1 4. 7 4. 5 CPIX (Metropolitan and urban, average for year) Current account balance (percentage of GDP) -1. 1 -3. 2 -3. 8 -5. 5 -5. 3 -5. 7 -5. 9

SECTORAL TRENDS Growth in non-agricultural sectors remains strong Fast growing sectors include construction, financial and transport National Treasury

KEY PROJECTS Ø Growth and Development Summit Agreements Ø GDS Peer Review Ø Seta Performance Review Ø Co-operatives Strategy Evaluation Ø Decent Work Country Programme Ø Research into Employment Trends in the Agricultural Centre Ø Retirement Fund Trustees Conference Ø Labour Market Policy Review Ø SMMEs regulatory Review Ø Service Delivery Review Ø SMMEs Tax Review Ø Study on the Employment Trends in the Agricultural Sector

SECTION 3 FINANCE

Budget - Income INCOME BASELINE 2007/8 2008/9 2009/10 Grants received (Department of Labour) 12 712 000 13 348 000 13 959 000 14 657 000 Rental income (PSA) 363 000 400 000 440 000 484 000 Interests 50 000 51 000 Total income 13 125 000 13 798 000 14 450 000 15 192 000

EXPENDITURE BASELINE 2007/8 2008/9 2009/10 Capital expenditure 603 000 235 000 100 000 110 000 Communication & Special Projects 4 890 700 5 263 600 5 464 000 5 602 900 Capacity Support 1 095 000 1 446 000 1 590 000 1 749 000 Administration 2 346 200 2 403 400 2 421 000 2 519 000 Staff Cost 4 190 100 4 450 000 4 875 000 5 211 100 TOTAL EXPENDITURE 13 125 000 13 798 000 14 450 000 15 192 000

BUDGET – EXPENDITURE Capital Expenditure Baseline 2007/8 2008/9 2009/10 Computers and printers 60 000 40 000 25 000 Furniture and fittings 200 000 50 000 45 000 Office equipment 13 000 15 000 20 000 Software 30 000 20 000 Building refurbishment 300 000 100 000 - - Total 603 000 235 000 100 000 110 000

COMMUNICATION AND SPECIAL PROJECTS BASELINE 2007/8 2008/9 2009/10 Publications 270 000 300 000 320 000 Annual Report 180 000 200 000 220 000 240 000 Website and internet 70 000 90 000 70 000 95 000 Public Relations 15 000 20 000 25 000 30 000 Travel 1 390 500 1 429 600 1 450 000 1 510 000 Accommodation 99 600 89 000 93 000 96 000

BUDGET – EXPENDITURE COMMUNICATIO N AND SPECIAL PROJECTS BASELINE 2007/8 2008/9 2009/10 Venue and refreshments 265 500 280 000 200 000 National Summit 500 000 604 000 650 000 760 000 Research 381 000 400 000 450 000 300 000 Subscriptions 22 000 25 000 31 000

BUDGET – EXPENDITURE COMMUNICATION AND SPECIAL PROJECTS BASELINE 2007/8 2008/9 2009/10 GDS 1 368 900 1 404 000 1 420 000 1 528 900 Statutory obligations 100 000 International meetings 160 000 200 000 300 000 Promotion of Social Dialogue 68 200 122 000 161 000 92 000 Total 4 890 700 5 263 600 5 464 000 5 602 900

BUDGET – EXPENDITURE CAPACITY SUPPORT BASELINE 2007/8 2008/9 2009/10 Community 438 000 573 000 630 000 699 500 Labour 438 000 573 000 630 000 699 500 Business 219 000 300 000 330 000 350 000 Total 1 095 000 1 446 000 1 590 000 1 749 000

BUDGET – EXPENDITURE ADMIN BASELINE 2007/8 2008/9 2009/10 Administration costs 2 346 200 2 403 400 2 421 000 2 519 000 Total 2 346 200 2 403 400 2 421 000 2 519 000 STAFF COST BASELINE 2007/8 2008/9 2009/10 Staff costs 4 190 100 4 450 000 4 875 000 5 211 100 Total 4 190 100 4 450 000 4 875 000 5 211 000

SECTION 4 KEY CHALLENGES

CHALLENGES BROADLY Labour Market Policy Skills development Employment Equity Institutional capacity Insolvency legislative reforms Polemics of Labour market policy Trade, Investment and Industrial Policy Reclaiming the developmental agenda (WTO) Creating a balanced Investment environment Leveraging Public Investment Initiatives Leveraging the National Industrial Policy Framework Fiscal and Monetary Policy Exchange rate Tax regime (SMMEs) Uitilising the current Fiscal space – Budget surplus

Poor relationship with Government Depts outside of Labour, Trade, Public Works and Treasury. Growing numbers of new entrants into the labour market. Poor relationship with Parliamentary committees outside of Labour, Trade, Public Works and Finance. Policy co-ordination. Late tabling of issues at Nedlac or not at all in some cases. Mandates obtained from cabinet too tight to allow space for trade offs in the Nedlac processes. Tight timeframes to finalise issues and no flexibility from some government departments. Sequencing of processes sometimes undermines social dialogue.

SECTION 5 WAY FORWARD

Adherence to the protocol for tabling issues at Nedlac Implementing the agreed recommendations of the Nedlac Review report. Building relationship with Government policy formulation instruments Improve policy coordination Build capacity at all levels of policy making Strengthening statutory bodies